Deciding to start your own business is a huge decision, no matter what year you start up in. However, it is just the tip of the iceberg of the many decisions you’ll have to make as an entrepreneur. After deciding what kind of business to run and your company name and location, you have to think about what sort of business entity you’d like to file as and which one suits your business best.
One available option is the S Corp. An S Corp is often thought to be a type of corporation, but in actuality it’s a C-Corporation with an S-Corporation tax election. Upon declaring this election, the federal government knows to tax this business as a partnership instead of a corporation. By being taxed as a partnership, the business is only taxed at the shareholder level. Lots of business owners opt for the S Corp option because of the limited liability protection, the ability to raise money by selling shares, and to gain credibility.
If this is the entity you feel suits your business best, here are four things to keep in mind during your first year as an S Corp.
Keep your minutes up to date.
Your minutes are important not only so that the state can make sure that everything’s in order, but because they’re a great organizational tool for your business as well. It can be easy to get distracted with the quotidian duties of running a business, but minutes can really keep your business on track. Minutes are great to measure the progress and the larger decisions your business has made throughout the year. You can also keep the minutes to help keep all your shareholders up to date too.
Update your shareholders.
As they are investing in your business, it’s essential to keep your shareholders updated on what’s going on. This doesn’t have to be a formal weekly meeting or anything. An informal annual meeting will do just fine. Just pass out a packet of significant happenings within your business, the goals you’ve reached, and what you will continue to strive for. You can even make this meeting a lunch or coffee date if you’d like, to keep things really informal and stress-free so long as the information is handed out and discussed ahead of time.
Make sure to file the necessary paperwork.
Not only do you need to file for a C Corporation and then file for S Corporation status, but you also need to obtain the proper business licenses and permits your start-up requires, and you need to do so on time. Regulations can vary depending on which state, industry, and locality you’re in, so be sure to check in with the state as to what your particular regulations include.
Protect your intellectual property.
Last, but definitely not least, place an emphasis on protecting your intellectual property! Get the necessary trademarks and copyrights to make sure that no one will use the name of your business or your logo whether it’s by accident or on purpose in the case of copyright infringement. The latter of which can really damage your company’s reputation too so protect your business and file for a trademark!
Author: Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.
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